Answered: A savings account balance is compounded…

A savings account balance is compounded continuously. If the interest rate is 3.1% per year and the current balance is $1077.00, in how many years will the balance reach $1486.73?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 1P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

4) A savings account balance is compounded
continuously. If the interest rate is 3.1% per
year and the current balance is $1077.00, in
how many years will the balance reach
$1486.73?

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